Virtual reality is too expensive for most people — but that's about to change

A
man tests the 'Zeiss VR One' virtual reality glasses during the
Mobile World Congress in Barcelona, Spain.Reuters/Albert
Gea

There are plenty of reasons to think that virtual reality (VR)
has finally arrived. Facebook's Oculus finally launched its
virtual reality headset this year, Sony is about to do the same,
Alphabet's Google is about to debut a mobile virtual reality
content hub (more on that later) and NVIDIA recently
blurred the lines between
a VR-ready notebook and a desktop VR system with its new graphics
cards.

But with all of its gains so far this year, there is still one
major hurdle virtual reality has to overcome: It's cost.

A high-end VR computer can easily cost $1,000. And many high-end
computers aren't VR-ready at all. In
fact, NVIDIA says 99% of computers on the market this year can't
handle the high-end specs you'll need for a true virtual reality
experience.

If you want to build your own VR computer, you'll need to shell
out at least a couple hundred dollars (on the low end) just for
the graphics card alone, not to mention the rest of the
computer's internals.

And then there are the headset costs. A high-end headset like
HTC's Vive or the Oculus Rift will run you $599 and $799,
respectively.

At the present costs, a VR fan will have to shell out at least
$1,600 for a high-end virtual reality experience. Those costs
will likely stymie VR's growth in the high-end market. But
it's not all bad news.

The best VR experience is going to cost a lot of money for a
while. But really good VR experiences, at much lower
costs, should be the real VR growth driver in the short term.

In
this March 26, 2015 photo, a woman demonstrates the Oculus
virtual reality headset at the Facebook F8 Developers Conference
in San Francisco.AP

In the coming weeks, Google will release a Daydream VR
platform, according to Bloomberg. The platform will be a way
for mobile users to access VR videos, apps, and other content.
It'll be the first VR content hub of its kind and I think it's
going to be one of the most significant ways that
virtual reality is adopted by consumers.

Google isn't just launching a hub for VR content -- it is also
paying some content creators up to hundreds of thousands of
dollars to make videos for Daydream, and is partnering with
device makers to ensure that smartphones will be ready to handle
all the content the platform offers.

Of course, Google isn't the only one pursuing cheaper
alternatives to VR. Sony will release its own VR bundle next
month (which includes a VR headset, games, and controllers) that
all work with its PlayStation 4, for just $499. Or, you can get
the headset for just $399.

That's not cheap, of course, but 40 million PS4 consoles have
already been sold and transitioning those console users to VR
users can be done with just a $399 headset.

AP/Christof Stache

So Google should help drive inexpensive mobile VR growth and Sony
will help VR growth among console users. Meanwhile, high-end
devices should continue to see their prices drop as more people
get interested in the technology.

Research firm Tractica says that the price of VR headsets should
decline by about 15% each year over the coming years. And that
drop in price will help spur growth in hardware sales and VR
content, which is expected to have a combined market value of
$21.8 billion by 2020, up from just $108.8 million in 2014.

So while virtual reality may still be too costly for many
consumers, there are plenty of upcoming hardware and software
offerings in the pipeline that should spur VR growth and drive
down costs. Mobile VR will be much cheaper than Oculus' headset,
and Sony's headset will fall somewhere in between. With such a
large VR market on the horizon and key tech companies making VR a
priority it won't be long before investors see this promising
technology turning into big gains.